DaimlerChrysler recalls 58,000 Smarts in Germany

FRANKFURT, May 27, 2005; Reuters reported that DaimlerChrysler is
recalling 58,000 of its Smart ForTwo microcars in Germany built between
1998 and 2000 due to a possible defect on its front axle, the company said
on Friday.

A Smart spokesman said cars in other countries could also experience the
same problem caused by rusting of supporting joints on the axle, but he
could not immediately say how many were affected in total.

"It can involve cars produced between October 1998 and December 2000,
and naturally they were also sold in other countries," the Smart spokesman
said, adding 202,000 ForTwos made at that time were sold around the
world.

The most important markets at the time were Italy, France, Switzerland,
Spain, the Benelux countries, Japan and Austria, he said. Customers there
would also be notified.

Of the 100,000 cars in Germany on the road, 58 percent were being
recalled. The others had already been checked in garages after customers
began complaining of the problem, he said.

Smart, a unit of Daimler's Mercedes Car Group, will cost the group up to
1.2 billion euros ($1.51 billion) in restructuring costs in 2005 as the
loss-making unit tries to break even in 2007.

Daimler's flagship Mercedes-Benz brand has also struggled with quality
problems, prompting the carmaker to recall 1.3 million vehicles earlier
this year, the marque's biggest ever.